ABOUT US

Steve Friess is a 2011-12 recipient of the prestigious Knight-Wallace Fellowship at the University of Michigan, where he will be studying the impact of the rapid expansion of Vegas-style gaming on Asia. He's a podcaster, author and Vegas-based freelance journalist who writes regularly for USA Today, The New York Times, Newsweek and many others. His column, "The Strip Sense" appears every Thursday in the Las Vegas Weekly. His books include "Gay Vegas" from Huntington Press and Knopf Mapguides' "Las Vegas."Friess co-hosts the weekly celebrity interview podcast The Strip Podcast "The Strip" with his husband, Miles Smith, the executive producer at KSNV-TV, Channel 3. For four years, Steve also co-hosted The Petcast with Las Vegas Sun education scribe Emily Richmond.

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Monday, December 15, 2008

I'm not filing for anyone on the Treasure Island transaction, but another piece I'm working on has me chatting a lot today with a lot of relevant people. There are about three importnat questions I've had about this: How much land does Ruffin get for $775 million, what's next in the MGM Mirage firesale and what happens to Mystere?

Some answers:

* How much land? Nobody's quite sure, actually. The 100-acre figure I cited earlier is roughly the combined Mirage and TI parcel (see here from aerial thanks to Google Earth) and the dividing lines have not been drawn in this deal yet. Deutsche Bank analyst Bill Lerner says there's about a 20-acre no-man's-land of vegetation between Mirage and TI. MGM Mirage spokesman Alan Feldman, who was with Mirage Resorts when TI was opened, says he thinks the TI is on about 17 acres but that not everything goes to Ruffin anyway.

In fact, and this is news, it's already been determined that the TI's valet cars will be parked in a garage on the Mirage's property and the TI's employee parking garage will also continue to be owned by MGM Mirage. Ruffin will pay a fee to MGM Mirage for use of those structures, Feldman said. Still, everyone keeps telling me my fixation on the amount of land is irrelevant because Ruffin's not going to redevelop. Perhaps, and if it were anyone but Ruffin, it wouldn't be so interesting. But, as Lerner agreed, Ruffin is the one whose sale of the Frontier property for $35 million an acre sent Strip real estate into the stratosphere. And the point here is that if you can buy a functioning, currently-but-not-forever-depressed business and the land it's on for $775 million now, how will anyone be able to justify paying exorbitant per-acre prices again anytime soon? "Any way you slice it, he has sold brilliantly and seemingly bought brilliantly," Lerner said of Ruffin's Vegas dealings.

* What's next? I actually forgot to ask Feldman but I suspect he wouldn't be specific anyway. Lerner is less inhibited. Here's his list of what MGM Mirage could sell to improve its liquidity while not harming its core business: "You could see some land deals, maybe they'll sell some of their land south of Mandalay Bay or across the street from the Luxor. I think the other stuff probably exploring might include MGM Grand Detroit, although it's tough to sell something in Detroit right now, but they might look at Biloxi (Beau Rivage), Elgin, Ill. (the Grand Victoria), maybe even their share of Borgata in Atlantic City." Monte Carlo isn't core but its location makes it unlikely since MGM will want to control almost the entire NY-NY-to-Bellagio block. And Circus Circus, in good times, is a cash cow. A slum, true, but a profitable one.

* Le future de Mystere. Feldman says that Ruffin gets Mystere, obviously, and it will continue to operate uninterrupted. However, should Ruffin choose to close the original Cirque sit-down, MGM Mirage's exclusive deal with Cirque du Soleil in Las Vegas dictates he can't replace it with another Cirque production. Which means, I suspect, that Mystere will never, ever, ever close. Ever.

3
comments:

What about the whole Montreux thing that Ruffin wanted to do before ELAD offered him that ridiculous price on the land for the Frontier?

Ruffin was pretty emphatic about having jazz on The Strip. Maybe he'll actually re-brand TI and bring it there. Location gives that property a whole bunch of potential....interesting to see what happens....although at the price he got it at, he may very well just flip it.

Its an out there question and assumes that Ruffin is in it for the long term, but how hard would it be for him to build a Subway line from Trump to TI, it would make obvious sense to link the two places, just don't know how do-able it is to go under the Fashion Show Mall....

THE STRIP FINALE

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